Optimize Your Google AdWords Spending by Tracking KPIs

Website Analytics March 2nd, 2008

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image-Setting Key Performance Indicators

Setting Key Performance Indicators for CPC or PPC Traffic

As a Google Analyst one of the important and challenging concepts to manage is establishing the most applicable web metrics to every tracking campaign managed. The reason for this blog post is to provide some clarity and guidelines in setting up Google Analytics key performance indicators for PPC (Pay Per Click) traffic.

What is CPC?

CPC Analysis

CPC is paid search advertising or PPC (Pay per Click) traffic. This is simply traffic you are paying for. Analysis is critical with this traffic because of that. The bottom line is "What is your ROI?" In order to answer these questions we need to take a closer look at the 3 basic elements that make up a PPC (CPC) campaign.

Elements of a CPC Campaign

The objective of any PPC campaign is all about making 3 basics all work together.

  1. Selected Keyword– The selection of keywords you make should be well researched and very relevant to your campaign.
  2. Ad Creative- Catch your visitor’s eye. The right keyword combination and/or ad creative is a recipe for success every time.

    This is only the first 2 steps. At this point you haven’t made a dime.

    What can we do to help us convert this visitor? Answer?

  3. The Landing Page– This is the page you send the traffic to! Match the previous 2 elements to an appropriate landing page is critical. Generally the landing page will have a prominent, brief title that will contain the main (theme) keyword with a very simple graphic layout. If this page does not appeal to the visitor your page will get a visitor "bounce". A bounce is simply an abandonment of the page. When you are receiving a high degree of bounces, this translates to "paying for nothing". So we need to develop a goal funnel that is optimized to make visitors complete the actions we have in mind. I call this a harmonic balance. The best tool on the market for this job is Google Analytics.

How to Establish Key Performance Indicators for a Tracking Campaign

Deciding on the Right KPIs

Key Performance Indicators will be different from site to site, but there are some basics that can aid in deciding what KPIs are best suited for each tracking campaign. Below I will show sample projects done on key performance indicators that I use as a guideline.

Examples of Key Performance Indicators

FREE Website Analysis - SEO Information!Lead Generation Site

A lead generation site has a primary end goal for a site of simply developing leads by way of phone calls and/or lead forms.

  1. Conversions– The amount of leads you are getting from that paid source.
  2. Conversion Rate– How effective your CPC ads are at delivering prime traffic to your site.
  3. Pay Per Visit Value– This is the average dollar value of each visit. You can stack this metric up against the costs of each visitor to estimate whether you are coming out as a winner or loser.
  4. Closing Rate– This is not included in Google Analytics but is an essential part of determining the true value of each lead. For example if your sales team gets 500 leads from a lead form and has a very low closing rate from its sales people it may be time to look at changes. Look back at the ad chain from the keyword right down to your sales team.
  5. CPA– Cost per acquisition helps you watch costs. Adwords, Yahoo!, and Bing all have there own tools provided for this and they are great to use. When you ad Google analytics, however, your world really opens up.

eCommerce Site

With eCommerce sites the primary goal is to sell product online using a payment gateway. When you have an eCommerce website all the important data is already logged in Google Analytics. The image ECommerce Site items, total purchase, amount spent. Now that we have it all collected we can zoom in between the cracks and dig deeper.

  1. Revenue– Take a close look at the total revenue and what it is composed of. What are your most popular items? What are the most popular paths a visitor takes to purchase? What are the highest abandonment pages in the goal funnel. These two factors strongly influence revenue generated.
  2. Per Visit Value– Described above.
  3. ROI– Comparing AdWords data to Analytics data will give you an exact return on investment dollar value
  4. CPA (Cost per Acquisition)– Google Analytics does not have a metric for this. You can use the AdWords conversion tracker to give you all the information needed to determine the precise revenue required for each conversion. With Google Analytics you get this exact value as well.

Content or Promotional Branding Sites

Focus in on CPC Traffic

The traffic for these sites can also be measured easily by keeping an eye on bounce rates, loyalty, time on site, visits, and pages views.

When you are initially developing key performance indicators remember to be flexible in your thinking. After the first month of data collection you should be able to benchmark performance. After a review you may need to incorporate other metrics to further enhance your tracking campaign and optimize your PPC spending. You should be able to see if you have the best key indicators in place at this point and make some actionable suggestions.

 

Post By Robert (29 Posts)

Robert can be found in the TechWyse experimentation lab mixing his 'Internet Marketing' potions every single day. Blessed with advanced level knowledge in the entire internet marketing sector dating back to 1998, Robert often contributes to the Rise To The Top blog with his analytics input through his in depth work experiences.In 2011 Robert moved up to Orillia on Lake Couchiching. Once settled in the Sunshine city, OrilliaBusiness.com was launched to help businesses tap into the awesome opportunities online. With a special knack for internet marketing and measurement, Robert is helping businesses in and around Orillia shine like fine cut diamonds.

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Robert can be found in the TechWyse experimentation lab mixing his 'Internet Marketing' potions every single day. Blessed with advanced level knowledge in the entire internet marketing sector dating back to 1998, Robert often contributes to the Rise To The Top blog with his analytics input through his in depth work experiences.In 2011 Robert moved up to Orillia on Lake Couchiching. Once settled in the Sunshine city, OrilliaBusiness.com was launched to help businesses tap into the awesome opportunities online. With a special knack for internet marketing and measurement, Robert is helping businesses in and around Orillia shine like fine cut diamonds.

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